Kentucky Business & Law Contractor Practice Test PDF – Licensing Exam Prep 2025/2026

Kentucky Business & Law Contractor
Practice Test PDF – Licensing Exam Prep
2025/2026

Section 1: Licensing Requirements (KRS 198B)
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1. Which state agency is responsible for issuing contractor licenses in Kentucky?
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A) Kentucky Department of Revenue
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B) Kentucky Labor Cabinet
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C) Kentucky Department of Housing, Buildings and Construction (DHBC)
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D) Kentucky Transportation Cabinet
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2. What is the minimum age requirement to obtain a Kentucky contractor’s license?
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A) 18 cx




B) 21 cx




C) 25 cx




D) No age requirement
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3. Which of the following is NOT a standard classification for a Kentucky contractor's licen
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se?
A) Residential
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B) Commercial
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C) Industrial
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D) Home Improvement
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4. How many years of work experience are generally required to qualify for a Kentucky co
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ntractor’s license exam? cx cx




A) 1 year
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B) 2 years
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C) 4 years
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D) 5 years
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5. A "Home Improvement Contractor" in Kentucky is legally allowed to perform work on:
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A) New commercial high-rises
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B) Industrial warehouses
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C) Existing residential properties (up to 4 units)
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D) New construction of shopping malls
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6. If a contractor changes their business address, how many days do they have to notify th
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e DHBC?
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,A) 10 days
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B) 30 days
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C) 60 days
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D) 90 days
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7. A Kentucky contractor's license expires on what date?
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A) January 1st
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B) December 31st
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C) June 30th
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D) The contractor's birthday
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8. To renew a lapsed license, a contractor must:
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A) Pay a late fee only
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B) Retake the entire business and law exam
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C) Pay a reinstatement fee and may be required to re-qualify
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D) Submit a new application and new financial statements
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Section 2: Financial Responsibility & Bonds
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9. What is the minimum surety bond amount required for a Kentucky contractor's license?
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A) $5,000
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B) **$10,000**
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C) $25,000
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D) $50,000
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10. The surety bond is designed to protect:
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A) The contractor’s employees
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B) The state government
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C) The public (consumers and subcontractors)
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D) The contractor’s insurance company
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11. Workers' Compensation insurance is required in Kentucky if a contractor has how man
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y or more employees?
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A) One or more
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B) Two or more
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C) Five or more
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D) Ten or more
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12. A contractor who knowingly writes a bad check to a supplier for materials is subject to
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:
A) Loss of bond only
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B) Criminal penalties and license suspension
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, C) A warning from the board
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D) Increased insurance premiums only
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13. Liquidated damages in a construction contract refer to:
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A) Damages paid for faulty materials
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B) A predetermined amount of damages for delay or non-performance
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C) The cost of the building permit
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D) The contractor’s profit margin
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14. If a contractor abandons a project, the surety company can:
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A) Ignore the claim
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B) Step in to find a new contractor to complete the work
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C) Force the owner to pay the full contract price
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D) Revoke the contractor's business license permanently
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Section 3: Contract Law & Documentation
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15. For a contract to be legally enforceable in Kentucky, it must include:
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A) A notary signature
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B) A clear scope of work, price, and signatures of both parties
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C) A lawyer’s approval
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D) A performance bond
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16. The "Statute of Frauds" requires that contracts for the sale of land or improvements o
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ver a certain value must be:
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A) Filed with the county clerk
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B) In writing and signed by the party to be charged
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C) Approved by a judge
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D) Recorded with the DHBC
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17. A "Change Order" in a contract must be:
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A) Oral to be flexible
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B) In writing and signed by the owner and contractor
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C) Priced at 10% over the original contract
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D) Filed within 24 hours
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18. If a contract does not specify a completion date, the law generally requires the contrac
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tor to complete the work within:
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A) 30 days
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B) 60 days
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C) A "reasonable" time based on the scope of work
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D) 1 year
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